Compulsory withdrawals from ARFs

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JimmyB99

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If some under age 60 dies in a given year (say 2022) and his wife, who is over 60, inherits his ARF - is the "compulsory" 4% withdrawal mandated in the year of death? Is there any leeway if the death happens very late in the year? Thanks in advance.
 
If an ARF is set up after the end of November there's no requirement to take a withdrawal from it until the following year. In this case the widow is setting up her own ARF, taking a transfer from his ARF. So if she does that in December, the 4% withdrawal is not required that year.
 
Brilliant LDFerguson - thanks. That seems like a sensible solution but was beyond my google research skills!!
 
The deceased's assets have to go through probate. Once the life company are notified of the death, money won't go out of the policy until probate is completed. When probate is completed and the ARF has transferred to the wife, imputed distribution kicks in. Like Liam said, if the new policy is after 30 November (the cut off date each year), the distribution starts the following year.
 
Steven Barrett said:
The deceased's assets have to go through probate. Once the life company are notified of the death, money won't go out of the policy until probate is completed. When probate is completed and the ARF has transferred to the wife, imputed distribution kicks in. Like Liam said, if the new policy is after 30 November (the cut off date each year), the distribution starts the following year.
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If I die on 31 December 2022 (hopefully not), and probate isn’t granted until 1 January 2024, is there a distribution required for 2023?
 
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No, once the life company has been notified. There wouldn't be a distribution until 2025 in that case.

What I have seen is the life company not being notified of the death as the surviving spouse needs the distribution payment, so they say nothing and then present the death cert and completed probate at the same time.
 
Thanks Steven - much appreciated....

So just so that I completely understand the position.....

(a) Once a married person dies and the insurance company is notified, there are no withdrawals, mandatory or otherwise, until probate has been completed.

(b) When probate is completed, the spouse may be subject to "mandatory" withdrawals if s/he is over 60 in a given year unless the ARF is put into the spouse's name in December, in which case the mandatory withdrawals happen the following year.

1. Is the above correct?

2. Does this mean that if someone advises the insurance company promptly after his/her spouse's death and that, for whatever reason, probate takes ages to complete, that the surviving spouse would not be able to access the ARF income stream until probate is resolved?
 
Once probate is granted the assets are beneficially owned by the spouse so normal arf rules apply. I may of misread the above but it appears to be suggesting that the spouse could delay setting up the arf to avoid a distribution. It’s my understanding that this is incorrect.
 
I'm not really sure where you are getting the "spouse could delay setting up the arf to avoid a distribution" idea. In any event, are you in agreement that until probate is finalised, then no distributions should occur?
 
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